Most Gulf markets end lower as oil prices drop; Egypt up | Reuters

Most Gulf markets end lower as oil prices drop; Egypt up | Reuters

Most Gulf stock markets ended lower on Thursday, as oil prices declined after Federal Reserve Chair Jerome Powell highlighted banking sector credit risks for the world's largest economy.

Crude prices — a key catalyst for the Gulf's financial markets — slid 0.6% on Thursday with Brent crude down to $76.21 at 1145 GMT.

Powell said on Wednesday that banking industry stress could trigger a credit crunch, with "significant" implications for an economy that U.S. central bank officials projected would slow even more this year than previously thought.

Dubai's benchmark index (.DFMGI) fell 0.9% after rising for two sessions, weighed down by losses in industrial and financial sectors with real estate developer Emaar Properties (EMAR.DU) losing 2.1% and the emirate's largest lender, Emirates NBD (ENBD.DU), falling 0.4%.

The low-cost flyer Air Arabia (AIRA.DU) lost 7.1% in its steepest intraday decline since Nov. 28, 2021 as it was trading ex-dividend.

In Abu Dhabi, the index (.FTFADGI) fell 0.6%, after gaining in the previous session, dragged down by a 1.7% drop in blue-chip property developer Aldar Properties (ALDAR.AD) and a 2% decline in conglomerate Alpha Dhabi Holding (ALPHADHABI.AD).

First Abu Dhabi Bank (FAB.AD), the largest lender in the United Arab Emirates, slumped 2% and Multiply Group (MULTIPLY.AD) lost 2.6%.

Abu Dhabi-based investment company Multiply shareholders on Thursday approved that no dividend would be distributed for 2022.

"With interest rates expected to go higher this year, the tighter monetary policy could have a stronger impact on stock markets and on oil demand in the US and Europe," said Farah Mourad, Senior Market Analyst of XTB MENA.

"However, improvements in the Chinese economy and changes in monetary policy could alleviate these pressures". The benchmark index (.TASI) in Saudi Arabia ended 0.9% higher, extending previous session's gains. The index was lifted by gains in almost all sectors with world's largest Islamic bank Al Rajhi Bank (1120.SE) surging 1.2% and oil giant Saudi Aramco (2222.SE) climbing 1.4%.

The Qatari index (.QSI) edged up 0.3%, extending its three-session rally with finance and industry sectors witnessing gains, while the energy and materials were in the red.

The region's largest lender, Qatar National Bank (QNBK.QA), added 0.7% and conglomerate Industries Qatar (IQCD.QA) gained 0.9%.

Qatar Gas Transport (QGTS.QA) and Mesaieed Petro (MPHC.QA) lost 0.7% and 0.8%, respectively.

Outside the Gulf, Egypt's blue-chip index (.EGX30) surged 2.4%, after declining in the previous session, with all sectors in the positive territory.

Commercial International Bank (COMI.CA) and Egypt Kuwait Holding (EKHO.CA) climbed 2.3% and 10%, respectively.

Meanwhile, the World Bank said on Wednesday it had approved a new $7 billion partnership agreement with Egypt for 2023-2027.

Credit Suisse Losses Turn Middle East Investors Cautious on Bank Deals - Bloomberg

Credit Suisse Losses Turn Middle East Investors Cautious on Bank Deals - Bloomberg

Middle Eastern investors are becoming more cautious of making fresh investments in global banks after emerging as some of the hardest hit by the Credit Suisse Group AG crisis.

Sovereign wealth funds and other investors in the region have been spooked by the market turmoil that wiped $1 billion from Saudi National Bank’s stake in the Swiss lender and are likely to be more wary on deals involving foreign financial firms, bankers and lawyers with knowledge of the matter said. The crisis is accelerating a pivot toward other sectors such as healthcare and technology, bankers said, asking not to be identified discussing matters that aren’t public.

The most recent losses on Credit Suisse are a stark reminder of a series of investments made by Gulf investors during the 2008 financial crisis - many of which ended in financial loss or legal battles. Flush with cash after oil’s recent surge, Middle Eastern investors had resumed exploring deals for foreign lenders. Any change in that strategy would be a blow to the global financial sector, potentially depriving Western institutions of much needed petrodollars.

“There have been some legacy issues in the Gulf around investments from the 2008 financial crisis and the Saudi National Bank experience with Credit Suisse will make them more nervous around the risks during this sensitive time,” said Ayham Kamel, head of Middle East and North Africa at political risk consultant Eurasia Group. “The Credit Suisse situation might also present some questions for Gulf sovereigns around ability to drive restructuring plans in some institutions.”

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#Saudi, #UAE investors plan to invest in SpaceX - The Information | Reuters

Saudi, UAE investors plan to invest in SpaceX - The Information | Reuters

A unit of Saudi Arabia's investment fund and an Abu Dhabi-based company are planning to invest in a multi-billion dollar funding round for Elon Musk-led SpaceX, The Information reported on Wednesday, citing people familiar with the discussions.

The funding round is expected to value the rocket maker at about $140 billion, the report added.

SpaceX raised $2 billion in 2022 and $2.6 billion in 2020, according to venture capital firm Space Capital.

The company and Morgan Stanley's representatives have told investors that Saudi Arabia's Water and Electricity Holding Company, part of the country's sovereign wealth fund, and United Arab Emirates' Alpha Dhabi are part of the funding round, according to the report.

SpaceX, Saudi Arabia's Public Investment Fund and Alpha Dhabi did not immediately respond to a Reuters request for comment.

Australia grants interim nod to Qantas-Emirates transport alliance | Reuters

Australia grants interim nod to Qantas-Emirates transport alliance | Reuters

The Australian competition regulator said on Thursday it gave an interim permit for Qantas Airways Ltd (QAN.AX) and Emirates to continue their passenger and cargo transport alliance, while it assessed their application for final authorisation.

Qantas and Emirates' existing five-year authorisation is due to expire at the end of March. The parties are seeking another five-year extension to the alliance, the Australian Competition and Consumer Commission (ACCC) said in a statement.

Under the current authorisation, Qantas and Emirates coordinate their operations across their networks, covering routes between Australia and the United Kingdom or Europe, New Zealand, Asia, the Middle East and North Africa.

"The ACCC may review the interim authorisation at any time and its interim authorisation decision should not be taken to be indicative of whether or not final authorisation will be granted," the regulator's Commissioner Anna Brakey said.

GCC central banks track US Fed move; hike key rates by 25bps

GCC central banks track US Fed move; hike key rates by 25bps

Central banks in the GCC raised interest rates on Wednesday night in lockstep with the US Federal Reserve, which raised benchmark overnight interest rate by one quarter of a percentage point, taking the federal funds rate between 4.75% to 5%.

The Central Bank of UAE raised its base rate on overnight deposits by 25 basis points (bps) to 4.9% effective from Thursday, the state news agency said.

Most central banks in the GCC usually track the Federal Reserve's policy rate moves as their currencies are pegged to the US dollar. The region has seen inflation averaging 5-6% during 2022, higher than in more than a decade but much lower than in many western countries.

The Saudi Central Bank, known as SAMA, raised its repo and reverse repo rates by 25 bps to 5.50% and 5%, respectively.

Bahrain's central bank also lifted its key interest rates by 25 bps. Its one-week deposit facility rate was raised to 5.75% and the overnight deposit rate to 5.50%. The four-week deposit rate was raised to 6.50% from 6.25%.

The central bank of Qatar, which had maintained its rates in the previous cycle, on Wednesday increased the lending and deposit rates by 25bps to 5.75% and 5.25%. The monetary authority also hiked the repo rate by 25bps to 5.50%.

Mideast Stocks: Most Gulf markets drop in early trade on weak crude

Mideast Stocks: Most Gulf markets drop in early trade on weak crude

Most stock markets in the Gulf fell in early trade on Thursday, tracking crude prices lower after U.S. Federal Reserve Chair Jerome Powell highlighted banking sector credit risks for the world's largest economy.

Crude prices — a key catalyst for the Gulf's financial markets — slid 0.7% on Thursday, with Brent crude down to $76.16 at 0745 GMT.

Most Gulf central banks lifted their rates by a quarter percentage point, mirroring the Fed rate hike as their currencies are largely pegged to the dollar.

Dubai's benchmark stock index dropped 0.7% in early trade, weighed down by losses in finance and industry sectors, with Emaar Properties PJSC losing 1.2% and the largest lender Emirates NBD Bank shedding 0.4%.

The low-cost flyer Air Arabia lost 6.7% in its steepest intraday decline since Nov. 28, 2021 as it was trading ex-dividend.

In Abu Dhabi, the benchmark stock index was down 0.5%, dragged by a 1.1% loss in Alpha Dhabi Holding and 1.1% decline in First Abu Dhabi Bank, the largest lender in the United Arab Emirates.

Shares of Abu Dhabi Aviation rose 1.9% after its board recommended approving the offer from ADQ aviation.

Abu Dhabi sovereign wealth fund ADQ had made an offer in October to take a controlling stake in the helicopter operator and merge it with ADQ stakes in Etihad Engineering, AMMROC and GAL to create a "globally competitive aviation business" with about 9.4 billion dirhams ($2.56 billion) in assets.

Saudi Arabia's benchmark stock index was slightly up 0.1%, lifted by gains in healthcare and energy sectors with Dr. Sulaiman Al-Habib Medical Services surging 3.6% and oil giant Saudi Aramco rising 0.8%.

Shares in Saudi Airlines Catering jumped 4.3% after it reported on Wednesday more than 18-fold jump in full-year net profit, exceeding market expectations.